L         J.    .  1  -.J-  .  -   -    - 

[MISC.  fffBS.] 

Investigation  of 

Transportation  Services 

in  Western  Cities 

March  4 -26,  1921, 


Report  of  the  Committee  on  Local 
Transportation  to  the  Mayor  and 
City  Council  of  the  City  of  Chicago 


Submitted  July  8,  1921 


Committee  on  Local  Transportation 

Ulys  es  S.  'xTvA.jrtr,  Chairman 


Investigation  of 

Transportation  Services 

in  Western  Cities 

March  4-26,  1921 


Report  of  the  Committee  on  Local 
Transportation  to  the  Mayor  and 
City  Council  of  the  City  of  Chicago 


Submitted  July  8,  1921 


Committee  on  Local  Transportation 
Ulysses  S.  Schwartz,  Chairman 


PERSONNEL 


COMMITTEE  ON  LOCAL  TRANSPORTATION 

Aid.  ULYSSES  S.  SCHWARTZ,  Chairman 

Aid.  LOUIS  B.  ANDERSON 

Aid.  JOSEPH  B.  McDONOUGH 

Aid.  GUY  GUERNSEY 

Aid.  JAMES  McNICHOLS 

Aid.  SAMUEL  0.  SHAFFER 

Aid.  JOSEPH  H.  SMITH 

Aid.  OSCAR  OLSEN 

Aid.  STANLEY  S.  WALKOWIAK 

Aid.  JAMES  B.  BOWLER 

Aid.  MATT.  FRANZ 

Aid.  THOS.  O.  WALLACE 

Aid.  HENRY  D.  CAPITAIN 

Aid.  WILLIAM  F.  LIPPS 

Aid.  THOMAS  F.  BYRNE 

Aid.  ALBERT  J.  FISHER 

Aid.  JOHN  P.  GARNER 

Aid.  JOHN  TOMAN 

Aid.  T.  J.  LYNCH 

R.  F.  KELKER,  Jr.,  Engineer 
THOMAS  E.  FLANIGAN,  Secretary 

DANIEL  A.  ROBERTS,  Special  Assistant  Corporation  Counsel 
BERTHOLD  A.  CRONSON,  Assistant  Corporation  Counsel 
WILLIAM  F.  HARRAH,  Sergeant-at-Arnts 
JOHN  DOHNEY,  Assistant  Sergeant-at-Arms 


ACKNOWLEDGMENT 

The  Committee  gratefully  acknowledges  its  indebtedness  to  the  City 
Officials,  Representatives  of  Civic  and  Commercial  Organizations  and  Officials 
of  the  Street  Railway  Companies,  of  the  cities  visited,  whose  generous 
hospitality  and  unreserved  willingsness  to  furnish  information  made  the  trip 
of  the  Committee  instructive  and  pleasant. 


REPORT  OF  THE  COMMITTEE 
ON  LOCAL  TRANSPORTATION 

The  Committee  on  Local  Transportation  visited  nine  cities — Kansas  City, 
Missouri;  Denver,  Los  Angeles,  San  Francisco,  Portland,  Seattle,  Vancouver, 
St.  Paul  and  Minneapolis.  In  each  of  these  cities,  through  the  courtesy  of  the  city 
officials,  street  railway  officials  and  representatives  of  civic  organizations,  con- 
ferences were  held  with  all  persons  interested  in  traction,  and  the  traction 
problem  of  the  city  was  discussed  and  compared  with  our  local  situation.  We 
sought  to  develop  especially  the  nature  and  character  of  the  management  of 
the  roads,  labor  conditions,  the  service  rendered,  method  of  public  control, 
difficulties  encountered,  public  attitude,  and  solutions  suggested.  In  each  city 
something  of  unique  interest  and  instruction  was  found.  An  analysis  of  the 
situation  in  the  cities  visited  follows: 

KANSAS  CITY 

The  transportation  facilities  of  Kansas  City  consist  of  a  street  railway 
system  and  a  jitney  organization,  the  latter  unique  in  its  size,  organization 
and  competitive  strength, 

The  street  railway  system  has  315  miles  of  single  track  and  775  cars, 
serving  a  population  of  450,000  in  an  area  of  59  square  miles.  The  rate  of 
fare  is  8  cents  cash,  and  tickets  are  sold  at  1%  cents  and  7  cents,  depending 
on  the  number  purchased.  The  average  wage  for  motormen  and  conductors 
is  55  cents  per  hour.  The  Company  is  operating  under  a  franchise  modeled 
after  the  1907  Ordinance  of  the  City  of  Chicago.  Its  franchise  provides  for 
an  allowance  of  6%  on  the  investment,  sets  up  a  fund  to  amortize  the  intangible 
values  and  also  provides  that  the  residue  should  be  divided  one-third  to  the 
Company  and  two-thirds  to  the  City.  A  board  similar  to  the  Board  of  Super- 
vising Engineers  in  Chicago  was  created. 

The  Company  seems  to  have  given  special  attention  to  what  is  known, 
in  common  parlance,  as  the  "knocking  down"  of  fares.  The  Receiver  advised  us 
that  the  Company  was  losing  several  thousand  dollars  daily  through  theft  of 
fares  and  that  efforts  had  been  made  to  reduce  the  amount  of  the  thefts,  but 
without  any  appreciable  result. 

The  service  rendered  by  the  Company  was  confessedly  inadequate,  the 
equipment  poor,  the  roadbed  in  bad  condition  and  the  wide  ruts  along  the 
tracks  in  some  of  the  main  thoroughfares  bore  witness  to  the  Company's 
failure  or  inability  to  meet  the  paving  obligations  contained  in  its  franchise. 

The  Company  has  made  a  special  effort  to  utilize  one-man  cars.  It  has 
95  of  these  cars,  the  majority  of  which  are  operated  on  light  traffic  lines.  A 
few  were  operated  on  Grand  Avenue,  the  principal  street  in  the  business 
district,  and,  while  the  Company  had  provided  all  extra  facilities,  such  as 
front-end  fare  collectors,  double  berthing,  etc.,  the  slow  loading  of  these 
cars  held  back  the  movement  of  the  larger  cars.  There  was  also  complaint 
against  the  one-man  cars  on  the  ground  that  they  were  uncomfortable,  which 
was  probably  due  to  the  poor  condition  of  the  roadbed. 

After  the  franchise  was  granted  by  the  City,  a  Public  Utility  Commission 
was  created  by  the  State,  and  assumed  jurisdiction  over  the  street  railways 
as  against  the  City.  An  increase  of  fares  having  been  granted  to  the  Kansas 
City  Railways  Company  from  5  to  6  cents,  the  City  contested  the  jurisdiction 
of  the  Commission,  and  the  case  was  carried  to  the  Supreme  Court  of  the 
United  States,  which  decided  against  the  City.  The  fares  have  since  been  fixed 
as  above  set  forth.  The  Company,  in  September,  1920,  went  into  the  hands  of 
Receivers,  and  the  lines  have  since  that  time  been  operated  by  them. 

In  December,  1918,  the  Company  had  a  strike,  which  lasted  for  a  period 
of  two  months.  During  that  time  the  Militia  was  called  into  service,  and  the 
turmoil,  riots,  destruction  of  property  and  loss  of  life  incidental  to  a  severe 
street  railway  strike  followed.  The  Company  won,  the  Union  was  broken,  and 
in  its  place  a  Brotherhood,  fostered  by  the  Company,  was  created.  There  grew 


out  of  the  strike  the  most  serious  problem  which  faces  the  Kansas  City 
Railways.  Many  of  the  strikers  bought  automobiles  and  engaged  in  jitney 
service.  This  traffic  increased  rapidly  and  cut  deeply  into  the  Company's 
receipts.  At  the  time  we  were  in  Kansas  City  the  Company  was  urging  the 
passage  of  an  ordinance  preventing  the  operation  of  jitneys.  Since  that  time 
we  are  advised  an  ordinance  has  been  passed  prohibiting  the  operation  of 
jitneys  on  streets  on  which  street  railway  cars  are  operated. 

The  people  of  the  city  seemed  very  keenly  alive  to  the  need  of  solving 
the  street  railway  problem.  A  committee  of  100,  representing  business  and 
civic  organizations,  was  formed  about  a  year  ago.  The  Committee  made  an 
exhaustive  investigation  of  transportation  conditions  and  prepared  a  voluminous 
report  covering  various  methods  of  financing  and  control.  Numerous  remedies 
were  suggested,  the  essence  of  which  was  the  establishment  of  the  service- 
at-cost  principle  and  a  "flexible"  rate  of  return  on  the  capital  invested. 

• 

DENVER 

The  street  railway  system  of  Denver  consists  of  253  miles  of  single  track 
and  343  cars,  serving  a  population  of  256,000  in  an  area  of  58  square  miles. 
The  Company  is  operating  under  a  franchise  which  originally  provided  for  a 
5-cent  fare.  The  rate  of  fare  is  now  8  cents  cash  and  IVz  cents  for  tickets. 
The  average  wage  for  motormen  and  conductors  is  58  cents  per  hour. 

The  service  rendered  by  the  Company  is  inadequate,,  and  new  equipment 
is  needed. 

Denver  is  known  as  a  home  rule  city;  that  is  it  operates  under  a  charter 
from  the  State  which  gives  it  control  over  public  utilities.  After  the  passage 
of  the  Public  Utilities  Act,  the  Commission  assumed  jurisdiction,  and  litigation 
between  the  City  and  the  Public  Utilities  Commission  followed.  The  Court 
sustained  the  power  of  the  City  of  Denver  to  control  its  public  utilities.  An 
amendment  to  the  franchise  ordinance  passed  by  the  City  Council  increased  the 
rate  of  fare  from  5  to  6  cents.  The  present  Mayor  ran  for  office  on  a  5-cent 
fare  issue,  and  after  his  election  the  amendment  was  repealed  and  a  5-cent 
fare  restored.  Upon  the  repeal  of  the  amendment  the  Street  Railway  Company 
reduced  the  wages  of  its  employes,  and  a  very  bitter  strike  followed.  During 
the  strike  the  Company  suffered  severe  financial  loss;  about  10%  of  its  cars 
were  destroyed,  and  many  people  were  killed.  Federal  troops  were  called  in, 
the  strike  was  broken,  and  the  Company's  employes  are  not  now  unionized. 

Within  a  month  after  the  strike  another  ordinance  was  passed  by  the 
Council  amending  the  franchise  and  allowing  an  increase  in  the  franchise  rate 
of  fare  to  6  cents.  At  this  time  the  Council  prepared  two  plans,  to  be  submitted 
to  a  referendum,  for  the  solution  of  the  Traction  problem;  namely,  a  service- 
at-cost  proposition  and  an  "elastic  fare"  plan.  Both  of  these  were  defeated. 

Last  fall  the  Company  went  into  the  hands  of  a  Receiver  on  the  petition 
of  one  of  its  creditors,  and,  at  the  time  we  were  in  Denver  the  Receiver  had 
presented  a  petition  to  the  Federal  Court  seeking  to  restrain  the  City  from 
interfering  with  the  collection  of  a  10-cent  fare.  We  understand  that  an 
order  -has  since  been  entered  by  the  Federal  Court  which  allows  an  8 -cent 
fare.  The  City  is  contesting  the  validity  of  this  order. 

Street  railway  traffic  in  Denver  seems  to  have  suffered  more  from  the 
increasing  use  of  private  automobiles  than  any  city  we  visited.  This  was 
probably  due  to  the  unusually  good  condition  of  the  paving  in  the  city  and 
on  the  highways  surrounding  Denver. 

No  general  movement  toward  the  solution  of  the  street  railway  problem, 
such  as  was  exhibited  in  Kansas  City,  was  apparent  in  Denver. 

LOS  ANGELES 

The  transportation  facilities  of  Los  Angeles  are  furnished  by  two  com- 
panies, the  Los  Angeles  Street  Railway  Company  and  the  Pacific  Electric 
Company.  The  former  company,  which  is  owned  and  controlled  by  one  man, 
H.  J.  Huntington,  furnishes  practically  all  of  the  local  service,  and  the  latter 


is  a  very  large  interurban  system  connecting  the  city  with  all  of  the  smaller 
cities  in  southern  California. 

The  Los  Angeles  Street  Railway  Company  operates  389  miles  of  track 
and  817  cars. 

The  fare  on  the  City  Lines  is  5  cents,  and  on  the  Pacific  Electric  6  cents, 
within  the  city  proper.  The  wages  average  54  cents  per  hour  for  motormen 
and  conductors.  The  service  and  equipment  are  fair. 

The  total  passenger  revenue  of  the  Los  Angeles  Street  Railway  Company 
for  the  year  1920  was  $8,982,722,  and  its  total  operating  expenses  $7,246,683. 
The  operating  expenses  included  the  payment  of  between  4  and  5  per  cent  of 
the  gross  receipts  to  the  State  of  California  as  a  tax. 

There  are  two  Utility  Commissions — the  California  Railroad  Commission, 
which  corresponds  to  the  Public  Utilities  Commission  of  other  States,  and  the 
local  Board  of  Public  Utilities,  created  by  the  franchise  grant  to  the  Street 
Railway  Companies.  There  has  been  no  jurisdictional  dispute  between  these 
Commissions.  The  most  striking  thing  in  Los  Angeles  was  the  fact  that 
the  Management  of  the  Roads,  the  Board  of  Public  Utilities  of  the  City,  and 
the  California  Railroad  Commission  were  acting  in  harmony. 

Plans  for  re-routing  of  cars  prepared  and  recommended  by  the  City's  Board 
of  Public  Utilities  were  put  into  effect  by  agreement  and  this  resulted  in  a 
large  saving  in  operating  expense,  enabling  the  Company  to  meet  increased 
wages  and  costs.  By  reason  of  a  subsequent  increase  in  wages,  the  Company 
is  now  seeking  an  increase  in  fares,  claiming  that  the  present  return  is 
inadequate. 

The  Company  has  in  operation  45  one-man  cars  on  the  outlying  lines. 
Jitneys  are  prohibited  by  city  ordinance. 

A  semaphore  signal  system,  automatically  operated,  controls  traffic  in  the 
business  district.  This  system  has  worked  successfully,  and  its  use  is  being 
extended. 

At  a  number  of  crossings,  the  turning  of  traffic  to  the  left  has  been 
prohibited.  This,  also,  we  were  told,  has  facilitated  the  movement  of  traffic 
in  the  congested  district. 

SAN  FRANCISCO 

The  transportation  facilities  of  San  Francisco  consist  of  two  systems  of 
railways,  one  the  Municipal  Street  Railway,  owned  and  operated  by  the  City, 
consisting  of  63  miles  of  track  and  197  cars,  and  the  other,  the  United  Railroads, 
consisting  of  255  miles  of  track  and  660  cars. 

As  nearly  as  can  be  determined,  the  population  served  by  the  municipal 
system  is  150,000,  and  by  the  private  system  356,000.  The  total  area  of  the 
city  is  42  square  miles.  The  rate  of  wages  for  motormen  and  conductors  is 
62^  cents  on  the  municipal  system  and  averages  58  cents  on  the  private  lines. 

The  Municipal  Street  Railway — 

The  equipment,  tracks  and  roadbed  of  the  municipal  system  were  found 
to  be  in  excellent  condition,  the  average  age  being  about  five  years.  There 
can  be  no  question  as  to  the  character  and  efficiency  of  the  management  of  the 
municipal  lines,  and  that  the  service  rendered  is  satisfactory.  To  all 
appearances,  so  far  as  the  Committee  could  find,  the  lines  were  operated  without 
political  influence. 

The  rate  of  fare  is  5  cents,  and  the  transfer  business  is  negligible.  There 
are  about  five  points  where  transfers  are  made  to  the  prviately  owned  lines, 
and  the  municipal  lines  receive  40%  of  the  fares  in  case  of  transfer. 

One  of  the  outstanding  features  is  the  operation  of  the  municipal  railway 
through  the  Twin  Peaks  Tunnel,  2%  miles  long.  The  cost  of  the  tunnel 
construction  was  assessed  against  the  property  benefited  east  and  west  of  the 
portals,  and  as  a  result  the  people  who  live  west  of  the  tunnel  can  reach  the 
center  of  the  city  in  25  minutes,  where  formerly  it  required  45  minutes. 


The  Street  Railway  System  is  a  part  of  the  Department  of  Public  Works 
of  the  city,  and  is  managed  by  the  Board  of  Supervisors  through  the  City 
Engineer  and  Superintendent  of  Railways. 

We  inquired  into  two  charges  made  against  the  municipal  system:  that 
the  City  had  taken  over  the  best  paying  lines  and  rejected  the  lines  which 
were  a  burden,  and  that  the  system  was  not  profitably  operated. 

The  City  Engineer,  Michael  M.  O'Shaughnessy,  vigorously  denied  both 
of  these  charges.  In  answer  to  the  first,  he  said  that  the  lines  had  been  acquired 
as  franchises  expired,  without  choice  on  the  part  of  the  city,  except  as  to 
Market  Street,  where  the  City  had  placed  its  tracks  on  either  side  of  the 
private  system.  As  to  the  second  question,  Mr.  O'Shaughnessy  stated  that  it 
had  been  their  object  and  purpose  to  maintain  very  heavy  depreciation  and 
other  reserve  funds,  in  order  to  insure  adequacy  of  service  at  all  times.  The 
depreciation  and  accident  allowance  was  18%,  and  after  making  this  extremely 
liberal  allowance,  'he  Company  showed  a  loss  of  $6,350  for  the  year  ending 
June  30,  1920.  This,  however,  does  not  take  into  account  the  taxes  or 
insurance  which  the  lines  would  have  to  pay,  if  privately  operated.  These 
taxes  are  estimated  at  $231,446.  To  offset  this,  the  Municipal  System  retired 
since  the  year  1910,  $698,300,  of  its  indebtedness,  has  accumulated  $2,263,000 
in  its  depreciation  and  accident  funds,  and  has  made  over  12  miles  of  exten- 
sions out  of  earnings  at  a  cost  of  $1,188,000.  The  legal  and  general 
administrative  expenses  are  borne  by  the  City. 

The  United  Railroads  of  San  Francisco — 

This  private  system  is  composed  of  about  24  independent  companies, 
whose  franchises  expire  at  various  periods. 

The  mileage  is  about  255,  and  the  maximum  number  of  cars  in  operation 
is  660,  serving  about  350,000  people.  These  lines  were  rebuilt  after  the  earth- 
quake and  fire  of  1906,  and  the  present  expenditure  for  maintenance  is  about 
$1,500  per  mile.  The  wages  paid  motormen  and  conductors  is  58  cents  per 
hour.  The  fare  is  5  cents,  and  the  transfer  ratio  is  about  33%.  The  roadbed 
and  equipment  is  not  in  good  condition. 

The  Company  has  recently  been  reorganized,  resulting  in  the  writing  off 
of  a  large  portion  of  the  stock  liability  and  at  the  same  time  reducing  the 
bonded  indebtedness  to  such  an  extent  as  to  eliminate  about  $1,000,000  a  year 
in  fixed  charges.  This  reorganization  has  placed  the  Company  in  a  much 
more  secure  financial  condition. 

The  cost  of  power  is  50%  greater  for  the  private  concern  than  for  the 
municipal  system  by  reason  of  the  fact  that  the  state  laws  of  California  permit 
power  companies  to  sell  power  at  any  rate  they  may  fix  to  a  municipality  or 
for  municipal  operation,  the  difference  being  made  up  in  rates  charged  to 
other  consumers. 

The  Company  is  operating  at  a  loss  at  the  present  rate  of  fare.  Taking 
in  comparison  the  cost  of  operation  in  San  Francisco  with  other  cities,  it 
should  be  noted  there  is  no  heating  of  cars  and  also  freedom  from  snow  and 
ice,  both  of  which  items  entail  heavy  expense  in  cities  of  less  temperate 
climates.  On  the  other  hand,  the  very  heavy  grades  add  to  the  difficulties  of 
operation  and  increase  the  power  consumption. 

The  passenger  traffic  center  in  San  Francisco  is  at  the  foot  of  Market 
Street,  where  the  Tramsbay  Ferries  dock.  This  causes  unusually  heavy 
demand  for  service  between  the  Ferry  and  retail  district,  and  also  the  out- 
lying parts  of  the  City.  In  order  to  share  in  this  business,  the  Municipal  Rail- 
way Company  obtained  rights  to  build  additional  tracks  on  Market  Street  on 
the  outside  of  the  existing  tracks  of  the  United  Railroads  Company.  This 
situation  presents  objectionable  operating  conditions  as  affecting  the  safety 
and  convenience  of  the  travelling  public.  The  use  of  track  is  not  evenly 
balanced  on  each  pair  of  tracks;  the  outside  tracks  of  the  Municipal  Company 
carrying  a  lesser  number  of  cars  than  the  inside  lines,  adding  to  the  difficulty 
of  the  patrons  of  the  private  lines  to  board  quickly  and  safely.  The  police 
department,  as  well  as  the  companies,  use  all  means  available  to  assist 


in  rapid  movement  of  the  cars  on  this  thoroughfare;  using  lights  for  traffic 
signals,  front-end  collectors,  and  a  fair  force  of  policemen  and  street  car 
supervisors,  whose  duties  are  given  entirely  to  traffic  movement. 

PORTLAND 

The  lines  of  the  Portland  Railway,  Light  and  Power  Company  are  operated 
under  a  25-year  franchise  with  a  provision  for  purchase  by  the  City.  The 
Company  operates  197  miles  of  track  and  543  cars.  In  addition  the  Company 
also  operates  110  miles  of  interurban  lines  serving  a  territory  of  over  800 
square  miles.  The  area  of  the  City  of  Portland  is  about  63  square  miles  and 
its  population  is  254,000. 

The  service  is  regulated  by  the  City  Council,  and  the  Public  Utilities  Com- 
mission of  Oregon  exercises  jurisdiction  over  rates  of  fare  as  well  as  service. 

The  State  and  City  Officials  were  apparently  co-operating  in  their  efforts 
to  obtain  good  service  at  the  lowest  possible  rate.  The  Mayor  advised  us  that 
matters  relating  to  improvement  of  service  are  discussed  in  an  open  manner 
with  the  Company  officials  and  acted  upon  after  investigation. 

The  Railway  Company  of  Portland  is  required  to  pay  City  Bridge  tolls.  On 
one  bridge  the  toll  is  3  cents  per  car. 

The  rate  of  fare  is  8  cents  cash  with  tickets  at  7.5  cents  and  7.3  cents 
depending  upon  the  number  purchased.  About  25%  of  the  total  rides  are 
transfer  passengers. 

In  order  to  distribute  loading,  the  Portland  Railway  Company  operates 
limited  service  on  its  more  important  lines  which  scheme  is  apparently  quite 
a  success. 

The  Railway  Company  recently  offered  to  its  employes,  patrons  and  the 
Portland  citizens  especially,  an  issue  of  five  year  8%  gold  notes.  These  notes 
could  be  had  in  small  denominations  and  provisions  were  made  for  purchase 
on  a  partial  payment  plan.  We  were  advised  that  a  large  number  of  employes 
of  the  Company  subscribed  for  these  notes. 

SEATTLE 

With  the  exception  of  30  miles  privately  operated,  Seattle  owns  its  entire 
street  railway  system  consisting  of  580  cars  and  231  miles  of  track.  The  area 
of  the  City  of  Seattle  is  94  square  miles,  (35  of  which  are  water)  and  its 
population  is  316,000. 

During  the  war  one  of  the  largest  ship  building  plants  on  the  Western 
Coast,  or  in  the  United  States,  was  located  at  Seattle,  and  the  question  of 
transportation  of  employes  to  and  from  the  plant  was  a  problem  which  taxed 
the  capacity  of  the  street  car  company. 

In  February,  1919,  when  the  management  of  the  plant  was  very  much 
concerned  about  the  question  of  transporting  shipyard  employes,  and  the 
Seattle  Electric  Railway  Company  seemed  unable  to  provide  the  sort  of  trans- 
portation that  was  necessary,  a  threat  was  made  to  the  Mayor  and  the  City 
Council  that  unless  the  transportation  system  was  made  more  satisfactory 
the  ship-building  contracts  would  be  taken  away  and  the  work  completed  in 
other  plants. 

Mayor  Ole  Hansen  took  the  matter  into  his  own  hands  largely  and  forced 
the  City  Council  to  sit  in  while  he  made  a  deal  with  the  owners  of  the  street 
railway  which  resulted  in  the  purchase  of  the  transportation  system  on 
March  1,  1919,  for  the  sum  of  $15,000,000  for  the  entire  system.  No  detailed 
valuation  was  made.  An  appraisal  made  by  one  Whipple,  subsequent  to  the 
acquisition  by  the  City,  placed  the  value  of  this  property  at  $7,843,000. 

A  general  feeling  exists  among  the  people  of  Seattle,  as  well  as  those  in 
close  touch  with  the  situation,  that  the  price  paid  was  several  million  dollars 
in  excess  of  fair  value. 

The  people  in  Seattle  are  not  of  one  accord  as  to  the  probable  termination 
of  this  situation,  but  it  seems  to  be  certain  that  under  the  plan  of  purchase 


it  will  not  be  possible  for  the  City  to  pay  for  the  property.  Friends  of  Ole 
Hansen  claim  that  the  price  was  all  right,  while  the  present  Mayor,  who  was 
formerly  the  Corporation  Counsel,  takes  the  position  that  the  City  could  have 
acquired  the  lines  without  the  payment,  of  one  cent  had  they  gone  about  it  in 
the  right  way,  and  he  is  still  of  the  opinion  that  there  would  be  some  chance 
of  obtaining  the  lines  in  spite  of  the  existing  contract,  if  a  proper  suit  were 
brought,  but  in  this  position  he  is  not  supported  by  the  City  Council. 

Beginning  with  April,  1920,  the  City  is  required  to  pay  as  annual  interest 
the  sum  of  $865,658.  (diminishing  about  $34,000  each  year  as  the  principal 
sum  is  reduced),  and  this  sum  is  required  to  be  in  the  hands  of  the  City 
Treasurer  30  days  prior  to  the  date  of  payment.  As  it  was  not  possible  to 
accumulate  this  sum  from  the  earnings  of  the  railway,  the  city  borrowed  from 
the  Corporate  fund  enough  money  to  make  the  required  payment  and  this 
caused  a  tax  payer  to  bring  a  suit  to  prevent  this  use  of  the  corporate  fund. 
The  case  had  not  been  decided  when  we  were  there. 

The  first  payment  on  the  purchase  price  in  the  sum  of  $833,000,  (being  one- 
eighteenth  of  the  $15,000,000,  the  purchase  price),  falls  due  in  October  this 
year,  and  the  City  Administration  seems  very  much  concerned  over  the 
proposition  of  where  this  money  is  coming  from,  for  it  is  thoroughly  apparent 
that  at  the  present  rate  of  fare,  namely  10  cents  a  single  ride,  or  three  for  a 
quarter,  funds  would  not  be  available  for  any  portion  of  it.  In  fact,  the 
Municipal  Railway  will  do  well  to  pay  back  to  the  corporate  fund  the  money 
borrowed  for  the  purpose  of  paying  interest  on  the  bonds  last  Spring. 

When  asked  whether  it  would  not  be  possible  to  charge  a  flat  10  cents 
fare  and  thus  accumulate  the  money  to  meet  these  obligations,  the  Mayor 
replied  that  in  his  judgment  it  would  cause  so  many  people  to  cease  using 
the  lines  for  transportation  as  to  reduce  the  earnings  rather  than  increase 
them,  basing  his  opinion  on  the  experience  they  had  when  they  raised  the 
fare  from  6l/4,  cents  to  8  1/3  cents  on  the  first  day  of  January,  1921.  He 
stated  that  many  people  would  walk  and  some  would  change  their  places  of 
residence  and  others  would  employ  other  means  of  travel,  not  so  much  because 
of  the  amount  of  the  raise  as  because  of  the  fact  that  car  riders  rebel  against 
a  fare  of  that  amount. 

During  the  month  of  August,  1919,  nearly  12,000,000  passengers  were 
carried,  while  in  August,  1920,  not  quite  10,000,000  were  carried,  the  difference 
for  the  month  of  August  in  the  two  years  being  exactly  1,978,163,  which  gives 
some  idea  of  the  effect  the  closing  of  the  shipyards  had  upon  street  railway 
traffic. 

The  total  receipts  from  all  sources  of  the  car  lines  for  the  year  1920  were 
$5,451,000. 

Estimated  Annual  Disbursements 

Vacations  of  Employes  per  Year $    100,000 

Depreciation   676,987 

Fixed  Charges  865,658 

Maintenance   of  Track  and   Equipment 1,200,000 

Power  : 591,448 

Wages  after  Deducting  Item  of  Vacations,  above 2,943,227 

Annual  Cost  6,377,320 

Annual  Retirement  of  Bonds 833,000 


Total    $7,210,320 

Total  Sum  to  be  Paid  in  18  Years $129,785,760 

It  is  therefore  perfectly  apparent  that  if  the  Seattle  Municipal  Railway 
is  to  meet  its  obligations  in  18  years,  it  will  have  to  have  more  than  five 
million  and  a  half  total  receipts  annually. 

When  the  City  took  over  the  lines  it  took  over  all  the  employes  as  well, 
except  the  management  and  attorneys.  The  City  Council  selected  its  own 
superintendent  paying  him  at  the  rate  of  $5,000  annually.  Legal  matters  are 
handled  by  the  regular  force  of  the  City  Attorney's  office. 


It  should  also  be  taken  into  consideration  that  other  items  of  expense, 
ordinarily  charged  to  the  operation  of  the  street  railways,  are  paid  for  out  of 
the  general  corporate  fund,  such  as  expense  in  the  purchasing  and  engineering 
departments,  and  an  item  of  $182,000  in  the  street  department  for  cleaning 
and  repair  of  right-of-way,  together  with  certain  items  of  overhead. 

The  employes  are  all  under  Civil  Service  and  are  therefore  given  two 
weeks  vacation  with  pay  as  is  the  case  with  all  city  employes  in  the  City  of 
Seattle.  One  month  after  the  City  took  over  the  lines  it  raised  the  wages  for 
motormen  and  conductors  from  48  cents  and  50  cents  per  hour  to  56  cents 
per  hour  and  in  the  following  October  wages  were  again  raised  to  65  cents 
per  hour,  which  is  the  present  rate. 

Seattle  lines  are  operated  on  an  open  shop  basis  so  far  as  temporary  em- 
ployes are  concerned,  all  others  are  under  civil  service,  and  the  benefits  under 
civil  service,  such  as  vacations,  apply  only  to  those  who  have  worked  one  year. 

While  it  is  the  plan  to  let  the  superintendent  run  the  street  cars  with  a 
free  hand,  yet  it  came  out  in  a  discussion  of  the  situation  in  the  office  of  the 
Mayor  that  the  City  Council  had  the  right,  and  exercised  that  right  whenever 
it  saw  fit,  to  direct  when  and  where  cars  should  run,  and  if  in  the  opinion 
of  the  Councli  the  number  of  cars  should  be  increased  on  a  certain  line,  it  was 
in  a  position  to  cause  a  change  to  be  made  and  cars  to  be  supplied  in  any 
manner  it  saw  fit.  So  to  this  extent  the  management  is  in  the  hands  of  the 
City  Council. 

Mayor  Caldwell,  however,  said  that  he  was  for  Municipal  Ownership,  and 
it  was  not  fair  to  use  the  Seattle  attempt  as  conclusive  proof  that  it  was  a 
failure. 

VANCOUVER 

The  City  of  Vancouver,  with  a  population  of  150,000  has  a  transportation 
system  consisting  of  102  miles  of  single  track  and  205  cars.  It  is  operated  by 
the  British  Columbia  Electric  Railway  Company.  The  fare  charged  is  six 
cents,  and  tickets  are  sold  six  for  35  cents.  Wages  of  conductors  and  motormen 
average  65  cents  per  hour. 

The  Company  now  has  an  application  pending  for  an  increase  in  fares. 

The  City  Administration  and  the  Company  were  working  in  complete 
harmony. 

ST.  PAUL  AND  MINNEAPOLIS 

The  Twin  City  Rapid  Transit  Company  operates  the  street  railway  lines 
in  the  Twin  Cities  and  also  the  suburban  lines  radiating  from  them. 

This  Company  operates  368  miles  of  track  in  these  cities,  with  951  cars. 
The  population  served  is  660,000  and  the  combined  area  of  the  municipalities 
is  103  square  miles. 

The  rate  of  fare  charged  at  time  of  our  visit  was  6  cents.  The  existing 
franchise  in  Minneapolis  provided  that  minimum  fare  should  be  5  cents, 
while  the  franchise  in  St.  Paul  provided  that  the  maximum  fare  should  be 
5  cents.  On  a  referendum  vote  the  people  of  St.  Paul  authorized  the  City 
Council  to  change  the  fare,  fixing  7  cents  as  a  minimum.  After  investigation 
and  the  preparation  of  a  tentative  valuation  a  temporary  rate  of  6  cents  was 
granted.  The  Council  in  Minneapolis  later  authorized  the  Railway  Company 
to  charge  6  cents  in  that  City  with  7  cents  as  the  maximum  fare. 

A  standard  of  service  was  established  at  the  time  the  change  in  fare  was 
considered  and  it  was  based  upon  the  average  number  of  passengers  carried 
per  car  mile  operated.  In  determining  the  rate  of  fare  the  Company  was 
authorized  to  charge  7  cents  provided  no  more  than  6%  passengers  per  car 
mile  were  carried.  It  was  found  that  the  available  equipment  was  insufficient 
to  meet  this  standard  of  service  and  finally  a  6  cents  fare  was  granted  with  a 
standard  of  7%  persons  per  car  mile  which  rate  was  to  remain  in  effect  until 
the  service  could  be  increased  to  meet  the  6%  passenger  standard. 


The  service  furnished  was  unusually  good  considered  from  the  point  of 
view  of  loading,  and  the  condition  of  tracks  and  equipment  was  probably  the 
best  seen  in  any  city  visited  by  the  Committee.  There  were  no  one-man  cars 
in  operation. 

At  the  time  the  Committee  visited  the  Twin  Cities  there  was  pending  in 
the  Minnesota  Legislature  a  bill  providing  that  the  state  should  have  control 
over  rates  of  fare  and  the  local  authorities  should  be  charged  with  service 
regulation. 

SPOKANE 

(Alderman  Guernsey,  at  the  request  of  the  Committee,  visited  Spokane, 
Washington,  and  submitted  the  following  report). 

The  traction  system  in  Spokane,  Washington,  is  owned  by  two  distinct 
companies — one,  the  Washington  Water  Power  Co.,  owning  87  cars;  and  the 
other,  the  Spokane  Electric  Railway  &  Power  Company,  also  called  the  Traction 
Company,  owning  45  cars.  All  cars  in  Spokane  have  been  made  over  into  one- 
man  cars.  The  fare  is  six  cents.  The  population  of  the  city  is  104,000. 

The  two  lines  are  competitors,  but  do  not  have  any  great  rivalry,  because 
they  are  so  laid  out  as  not  to  interfere  materially  with  each  other.  According 
to  the  statement  of  the  President  of  the  Washington  Water  Power  Company, 
Mr.  W.  E.  Coman,  the  value  of  his  company  is  four  and  a  quarter  million. 

Both  companies  have  applied  for  an  8-cent  fare,  but  the  Mayor  of  the 
•City  took  the  position  that,  while  the  companies  made  only  3%  on  the  value  of 
their  traction  properties,  they  were  profiting  in  other  lines,  that  is,  the 
furnishing  of  power,  heat  and  light,  and  the  earnings  from  all  sources  yielded 
about  7%.  The  position  of  the  companies  was,  that  each  individual  branch  of 
their  business  ought  to  yield  a  fair  return. 

The  maximum  wages  for  the  men  after  several  years  of  employment  is 
58  cents,  which  scale  has  been  in  effect  since  November  1,  1919. 

The  Washington  Water  Power  Company  earned  3%  on  its  book  value. 
Forty  per  cent  of  its  expense  is  wages  and  five  per  cent  damages.  The  cost  of 
electricity  is  charged  at  6  mills  per  kilowat  hour. 

The  Traction  Company  furnishes  a  great  deal  of  power  to  the  Chicago 
&  Milwaukee  Railway  Company  on  its  electric  lines  and  controls  large  power 
plants  in  the  vicinity  of  Spokane. 

CONCLUSION 

The  foregoing  analysis  of  the  traction  problem  in  other  cities  shows  that 
the  difficulties  confronting  Chicago  in  the  solution  of  its  traction  problem  are 
not  peculiar  to  our  city.  They  are  the  difficulties  presented  to  all  large  cities 
in  finding  the  proper  method  of  financing  street  railways  and  in  creating  the 
most  efficient  agency  to  manage  and  control  them.  Of  course,  our  local  problem 
lias  its  own  special  complications,  but  Chicago  is  in  a  better  position  today  to 
«olve  its  transportation  problem  than  any  of  the  large  cities  of  the  United 
States.  All  that  is  necessary  to  this  end  is  the  sincere  and  earnest  co-operation 
of  all  public  officials  and  public  spirited  citizens  interested  in  the  traction 
question.  As  long  as  plans  for  the  solution  of  the  traction  problem  are  set 
forth  merely  as  a  means  to  a  political  end,  and  monopolized  as  a  special  virtue 
of  any  political  organization,  the  people  of  Chicago  will  be  without  relief  from 
the  present  intolerable  traction  service. 

Certain  general  conclusions  may  be  drawn  from  the  observations  of  the 
committee.  These  are: 

1.  The  present  method  of  private  ownership  and  operation  qualified  by 
public  regulation  has  resulted  in  a  division  of  control  among  numerous  govern- 
mental and  private  agencies,  and  has  led  to  confusion,  wasteful  litigation  and 
ultimate  disaster,  as  evidenced  by  the  experience  of  Kansas  City  and  Denver. 

2.  The  operation  of  the  street  railway  lines  by  the  municipality  of  San 
Francisco  has  proven  satisfactory  to  the  people  of  San  Francisco. 


3.  The  acquisition  and  operation  of  the  municipal  railways  of  Seattle 
has  not  proven  satisfactory. 

4.  Rates  of  fare  are  necessarily  determined  by  the  character  of  service 
rendered,  quality  of '  management,  and  the  cost  of  financing,  and  the  lowest 
rate  of  fare  compatible  with  the  best  service  can  be  secured  only  by  the  most 
efficient  management  and  the  most  economical  financing. 

5.  The  most  efficient  management  can  be  had  only  by  unified  and  con- 
centrated  control    and    management   of   the    street   railways,    and    the    most 
economical  financing  by  the  issuance  of  securities  that  will  absolutely  assure 
payment  of  principal  and  interest. 

RECOMMENDATIONS 

We  recommend  that  a  sub-committee  be  appointed  to  make  a  study  of  the 
Traction  Bills  proposed  in  the  recent  session  of  the  Legislature  and  to  take 
suitable  action  in  the  event  of  a  special  session,  and  to  make  further  study  and 
recommendations  to  facilitate  the  solution  of  the  traction  problem,  and,  further, 
that  the  sub-committee  be  authorized  to  engage  such  legal  and  other  services 
as  may  be  necessary  for  this  purpose. 


A     000  764  1 54     1 


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